How to Calculate Your Available Home Equity in Texas


Maybe you have some home improvement projects you've meant to take care of, or maybe it's time to get that new car or truck you wanted. If so, it might be a good time to think about a home equity loan. These loans provide you with the money you need using the equity built in your home. And they do so at a much lower interest rate than other types of loans. Do you know how much equity you have built up in your home?
Calculating Your Available Equity
Don't worry, figuring out how much home equity you have to borrow against isn't that hard to do. In the most basic terms, the way you figure out how much equity you have built up in your home is by taking your home's fair market value (you get this by looking at your county tax appraised value) and subtract your mortgage balance from that. Let's say you bought your house for $200,000 and there was a housing boom and now your home is worth $300,000. You were able to pay off $100,000 of your initial mortgage loan leaving you with $100,000 left to pay. So, take the current worth of the home ($300,000) and subtract the balance left on your loan ($100,000) and you get the equity on your home ($200,000). The laws in the State of Texas do not allow you to take all that money out, however.